TORONTO Lawyers continue to haggle over how U.S. Steel Canada will be restructured, but a company official says progress is being made.

Chief restructuring officer Bill Aziz, who has been closeted since the weekend with dozens of lawyers fighting for their piece of the struggling company, said through a spokesperson Tuesday evening that the bargainers are "having constructive discussions and I am optimistic something will get done."

What they're talking about is how U.S. Steel Canada will finance its operations through what's expected to be a lengthy restructuring process. If an agreement on that can't be reached, the impact on more than 2,300 workers and 14,000 retirees in Hamilton and Nanticoke will be heavy.

At issue is a company proposal to finance its operations while under creditor protection with a $185-million loan from its parent firm under terms that put that debt ahead of other company obligations in Canada.

Legal challenges to that proposal have been filed by the City of Hamilton, the provincial government and the United Steelworkers union.

A court hearing was set for Monday to approve the company's proposal, and other matters, but it was derailed by the objections. Lawyers negotiated through the weekend and into Tuesday evening without reaching an agreement.

Any deal that is reached will require approval by Superior Court Justice Herman Wilton-Siegel. The session was adjourned shortly before 8 p.m. and is set to reconvene at 3:15 p.m. Wednesday. The judge said they were making "good progress."

In another development, Ontario's Independent Electricity System Operator (ISEO) has filed court documents asking that the company be required to pay its hydro bills five days in advance, twice a month, and that it post a $202,000 line of credit as a condition of staying plugged in.

The documents also ask that if the company defaults on future hydro bills, it be required to reduce its consumption to what it would use if the plant was idle.

The company owes the ISEO almost $5.4 million. Its bills were guaranteed by its American parent, but that guarantee was withdrawn Sept. 22.

U.S. Steel Canada filed for creditor protection in September citing years of losses, bad labour relations and the burden of topping up its seriously underfunded pension plans.

The Pittsburgh-based company purchased Stelco in 2007. Since then it has locked workers out three times to back demands for contract concessions and ended a century of steelmaking in Hamilton by permanently shutting down the last blast furnace.

While it has not tabled a detailed restructuring plan yet, an early proposal sent to the United Steelworkers Local 1005 bargaining team in Hamilton suggested severing the Hamilton and Lake Erie plants and selling the Nanticoke facility back to the parent company. The former Hilton Works plant in Hamilton would also be offered for sale, but with its aged equipment and thousands of retirees it is seen as a tough sell.

While improved stock markets have brought some life back to the company's pension plans, they remain seriously underfunded. Some estimates say if the company were to go bankrupt, pensioners would face the loss of up to 30 per cent of their retirement incomes. Other calculations put the loss as low as 15 per cent.

(1) Comments

By Viking|OCTOBER 08, 2014 01:10 PM

I would recommend to Rolf and the rest of the 1005 exec. to have at least one you present for any behind the scenes meeting between USS,usw and the province. Having seen the players from the international union involved in these proceedings you should proceed cautiously for the sake of your members and pensioners. You need to fight for Canadian jobs and pensioners and have their best interests come first and not give a damn about the international union.